Federal Financial Aid

This federal loan program enables eligible applicants to obtain student loans to meet their cost of attendance expenses. Undergraduate Students must be matriculated and enrolled in a minimum of six credits. Graduate Students must be matriculated and enrolled in a minimum of four credits.

Loan Terms are determined by federal statute and may vary each year. Before funds can be disbursed, students must complete an online loan counseling Entrance Interview and a Master Promissory Note (MPN).

Entrance and Exit Counseling
First-time Direct Loan borrowers must complete entrance counseling sessions on the web at studentloans.gov. During this counseling session students will learn about the terms of the loan and their rights and responsibilities as loan borrowers. No loans can be credited to a student’s account until entrance counseling is complete.

All recipients of a Federal Direct Loan who withdraw, drop below six (6) credits, or graduate must complete an Exit Counseling session on the web at studentloans.gov.

During this counseling, students will be able to view their loan history and learn about deferral and repayment options.

Repayment
The repayment of Direct Loans begins six (6) months after a student graduates or drops below half-time matriculated status. Visit studentloans.gov and click on the link “Repayment Plans and Calculators” to learn more.

Enhanced Loan Counseling
Monroe University has been selected to participate in a Department of Education Experimental Site initiative involving enhanced loan counseling. Of all undergraduate Direct Loan borrowers, those with a Social Security Number that ends in an even number will be part of the enhanced counseling group. These students will be required to complete enhanced counseling once each year in order to receive their loans. Those with a Social Security number that ends in an odd number will be part of the control group and will not be required to complete enhanced loan counseling. Information about students in both groups will be reported annually to the Department of Education.

Subsidized Student Loans
The Federal government pays the interest on the loan while students are enrolled at least half-time in college and during times of authorized deferment and forbearance. Repayment of the loan begins six months after the student graduates or the student’s enrollment status changes to less than half-time. Loan Terms: for disbursements made from July 1, 2023 through June 30, 2024, the interest rate for undergraduate subsidized Direct Loans is a fixed 5.50%.  Loan Terms are determined by Federal statute and may vary each year.

Unsubsidized Student Loans
Unlike the subsidized loan program, interest on unsubsidized loans begins when the loan is disbursed and is paid by the borrower, not the Federal government. Students have the option of paying these interest charges while attending school. If they choose not to pay the interest, it will accrue and be capitalized. Repayment of the loan begins six months after the student graduates or the student’s enrollment status changes to less than half-time.

Federal Direct Parent Loans (PLUS Loans)
These loans are available to parents of dependent students to help meet their children’s cost of attendance expenses. PLUS loan repayment begins within 60 days of disbursement of funds. PLUS Loan borrowers are subject to a credit check. If approved, parents are required to complete a Master Promissory Note (MPN). If a PLUS Loan denial is received, a student is eligible for an additional $2,000-$2,500 per semester, depending on grade level, in unsubsidized loan funds.

Loan terms are determined by federal statute and may vary each year.

The One Big Beautiful Bill Act (OBBBA) signed into law in July 2025 introduced several changes that will impact how students and families finance their education starting July 1, 2026. These changes are required by federal regulation and apply to all institutions.

Please note: These changes do not apply to the current 2025-2026 academic year. Monroe is unable to grant exceptions to these federal government policy changes.

While additional guidance may continue to emerge, here’s what we know today.
 

Part-time students will have their federal loan eligibility prorated based on the number of credits in which they are enrolled.

If you are enrolled less than full-time, your federal loans will be reduced according to your current credit load. Full time is defined as 12 credits per semester for Undergraduate students and 7 credits per semester for Graduate students.

The amount of loan funds you receive for semesters starting after July 1, 2026, may be lower than in previous terms if you are not enrolled full-time.
 

What you should do:

• Register for the appropriate number of credits each term.
• Review your financial aid award details in your student portal (MyServices) to see if federal loans are part of your tuition planning.
• Contact the Financial Aid Office if you have questions about your eligibility or loan amount.

There are new, tighter limits on loan borrowing.

Starting July 1, 2026, new borrowing caps will apply:

• Graduate students: $20,500 per year / $100,000 lifetime
• Parent PLUS loans: $20,000 per year per student / $65,000 lifetime

Undergraduate limits will mostly stay the same, though part-time students may qualify for less.

These limits apply regardless of a student’s cost of attendance.

Good news for continuing students:  If a student or parent received a Federal Direct Loan before July 1, 2026, the parent may continue borrowing under the previous loan limits for up to three additional academic years or until the student completes their degree program -- whichever occurs first – provided all of the following conditions are met:

• The student was enrolled prior to June 30
• The student had a Direct Loan disbursed prior to July 1.
• The student has maintained continuous enrollment
• The student has not stopped out or withdrawn

Please note that this continuation applies only to the degree program in which the student was enrolled at the time the first loan was taken out. It also remains valid only while the student continues attending the same institution where the initial loan was borrowed.

If a student withdraws or has a break in enrollment, the parent will lose eligibility for the legacy borrowing option and will be subject to the new annual and lifetime limits.

Impact on current borrowers: Existing limits remain in place for up to three years or until you complete your program.
 

New borrowers will have fewer repayment options.

Beginning July 1, 2026, repayment options for newly issued federal loans will be streamlined down to just two:

• Standard Repayment Plan: Fixed monthly payments over 10 to 25 years, depending on your balance.
• Repayment Assistance Plan (RAP): An income-driven option with payments ranging from 1% to 10% of your income, or as little as $10 per month for very low earners. Any remaining balance may be forgiven after 30 years.

Impact on current borrowers:
If you take out loans before July 1, 2026, your existing options remain available for now.

After July 1, 2026, RAP will become the only income-driven repayment option for new loans. Please note: Parent PLUS loans won’t qualify for RAP. To access any income-driven plan, you’ll need to consolidate before July 1, 2026 and enroll in an eligible option.

Grad PLUS loans will no longer be available.

The Graduate Loan program will be eliminated for students who first enroll in college on or after July 1, 2026.

If you were already enrolled in your current graduate program on or before June 30, 2026, and you received a Direct Loan disbursement for that program before July 1, 2026, you may continue borrowing under the legacy Graduate PLUS Loan provisions, provided you meet all other eligibility requirements.

Under this legacy status, you may borrow up to your Cost of Attendance (COA) minus any other financial aid received.

However, please note the following change, effective July 1, 2026:

• If you are enrolled less than full-time, your Graduate PLUS Loan eligibility will be prorated based on the number of credit hours for which you are registered in that semester.
• As a result, students enrolled part-time may see a reduction in the amount they are eligible to borrow.

Impact on current borrowers:
You can continue using Grad PLUS loans for up to three more years or until finishing your program.

Parent PLUS loans will no longer have access to loan forgiveness.

Parent PLUS loans issued after July 1, 2026 will no longer have a path to Public Service Loan Forgiveness (PSLF), since they won’t qualify for income-driven plans like RAP.

For current borrowers:
You may still qualify for PSLF by consolidating your loans and enrolling in an eligible repayment plan before key deadlines—especially before July 2028.

Hardship relief options will be more limited.

For loans issued on or after July 1, 2027:

• Economic hardship and unemployment deferments will be eliminated
• Forbearance will be capped at nine months within a 2-year period (down from 12 months at a time today)

Loan forgiveness may become taxable again.

The current federal tax exemption on student loan forgiveness expires at the end of 2025. If it isn’t extended, borrowers receiving forgiveness in 2026 or later may owe taxes on the forgiven amount.

• This mainly affects income-driven repayment forgiveness
• Public Service Loan Forgiveness is still expected to remain tax-free
   

What You Can Do to Be Prepared for These Changes
With so many changes ahead, a proactive approach can save you money and stress:

• Know and understand your current plan so you’ll know whether you’ll need to switch before 2028
• Keep the above in mind when considering additional borrowing. Compare your future options.
• Remember to track key dates that may impact you.
• Plan for borrowing limits, especially if you’re considering grad school.
• Evaluate parent loan strategies: Consolidation and timing are critical
• Keep your contact info updated so that you don’t miss important notices.
   

Students in need of funds beyond those available from federal, state, college, and outside grants, or work study and federal loans, may seek alternative non-federal loans. Students should carefully research these options as interest rates, fees, and loan terms vary widely among loan providers. Monroe University does not have a preferred lender list and it is up to the student and/or parent to find such alternative lenders. Once a desirable lender option is found and the student is approved, the student must then notify the  Financial Aid Office who will work with the lender to have the funds disbursed electronically to the school. 

In order to complete the approval process of an alternative non-federal loan, students must obtain the required form from the appropriate Student Financial Services Office.

All Federal financial aid requires that students complete the FAFSA application each year to remain matriculated (which means continuing to work toward your degree or certificate) and to maintain the required Grade Point Average and Completion Percentage at the end of each semester. These are Satisfactory Academic Progress (SAP) requirements. 

In addition, applicants

• must be a citizen or eligible non-citizen;
• must have a high school diploma or equivalent GED, or have completed an approved home school program.  If you do not have one of these, you will need to speak with a Financial Aid Counselor to determine how to resolve this issue;
• must have a valid social security number;
• must not be in default on a federal student loan, and not owe money on a federal student grant.